4 Steps To Creating A Household Budget You’ll Stick To

If you type the phrase “ create a household budget” into Google, you’ll find endless hits for budgeting software, apps, spreadsheet templates, and physical planners.

So it’s easy to become overwhelmed and not even making your budget because you don’t know which to choose.

In this post, we’re sharing with you how you can create a household budget that you’ll stick to.

Choose Your Method For Creating A Household Budget: 

There’s no right or wrong way to go about creating a household budget, so just find the way that works for you so that you can get started. 

Many people prefer to use an Excel spreadsheet, which is a great way to get a complete overview of everything coming and going out. Though, even if you prefer a simple piece of paper and pen, it doesn’t matter – as long as you start.

Write Down All Income And Expenses:

Now that you have your chosen method, it’s time to start plugging the numbers into your household budget. To do this, you’ll want to make 4 separate columns:

• Fixed income – this covers your salary and everything else you know is coming in each month;

• Essential outgoings – this is where you’ll list your must-pay bills, such as rent/mortgage, utilities, food, etc. Including a percentage of your income for your savings in this section is also a good idea;

• Non-essential outgoings – in this section, you’ll add things that you like to have, but that aren’t exactly essential, such as your Netflix subscription or a new pair of trainers.

• Fluctuating payments – this applies to both incoming and outgoing payments that aren’t fixed and includes things like credit card balances, payments towards a holiday fund, or bonuses from work.

Set Up Auto Payments:

There’s setting up a household budget and there’s sticking to one. If you want to stick to your budget, you will need a good system in place. The best way to create a system for managing your budget is to set up automatic payments for your bills. If your bank offers the option to have multiple sub-accounts, you should set these up. 

Then each time you receive your salary or income into your main account, you set up an automatic payment from this account for the total amount of your bills to be sent to a sub-account and separate automatic payment to go to a savings account.

Since you don’t see this money, you won’t spend it. Your bills are paid, and what’s left over is yours.

If your bank doesn’t offer sub-accounts, you can also open a separate account for your bills and use this process.

Track Your Spending:

You can only measure and improve what you track, so make a habit of writing down everything you spend.

Don’t forget to keep receipts to see where you’re going over or under budget. 

Then each week or month sit down and add this to your household budget tracking sheet.

After a couple of months, it’s amazing how much more in control of your spending you’ll feel.

Now it’s over to you.

Creating your household budget doesn’t have to be complicated.

So make a start today to get back in control of your finances – it doesn’t have to be perfect.